Appointing a non-executive director is a milestone for a growing company, and a NED agreement template UK boards rely on is how you put that appointment on a proper footing. A non-executive director agreement, more precisely a letter of appointment, sets out the terms on which a NED joins the board: their duties under the Companies Act 2006, the time they are expected to commit, their fee, their independence, and the indemnity the company gives them. This is not an employment contract and not an advisory agreement; it is its own document, because a director's position carries statutory duties and responsibilities that neither of those covers. This guide explains what a UK NED agreement should cover and how to draft one from vetted clauses in 99 Data Rooms. It is general information, not legal advice.
The companies that reach for this are startups and scaleups appointing their first independent directors, often at the point where investors want experienced oversight on the board, or where the founders themselves want a steadier hand in the room. Getting the appointment documented matters because a NED, once appointed, is a director in law with the same core statutory duties as any other, and both the individual and the company benefit from clarity about the role, the fee, and the protections around it. The appointment itself is usually recorded in board minutes or a board resolution, which is why the paperwork tends to move together.
What a UK NED agreement should cover
The document opens by defining the appointment: the term, when it starts, and how it can be ended by either side, including the fact that a NED remains subject to the company's articles and to re-election where the articles require it. It then addresses the duties, and this is where the letter is distinctly a director's document. A non-executive director is bound by the general duties of directors set out in the Companies Act 2006 (see Sources), including the duty to act within powers, to promote the success of the company, to exercise independent judgement, and to exercise reasonable care, skill and diligence, and the letter of appointment references these so the NED understands the responsibilities they are taking on. This is one of the clearest examples of why a vetted, UK-specific template matters: these are statutory obligations, not commercial preferences, and a generic or overseas template will not reflect them.
The commercial terms cover the time commitment, how many board and committee meetings, plus preparation and any ad-hoc calls, and the fee, which is typically a fixed annual sum rather than a salary, reflecting that a NED is not an employee. Independence is addressed directly: the letter usually asks the NED to confirm they are independent and to disclose anything that might affect that, and it deals with conflicts of interest, which links back to the director's statutory duty to declare interests in a proposed transaction under section 177 of the Companies Act 2006 (see Sources). The agreement also sets out confidentiality obligations, since a NED sees sensitive board material, and expectations around outside appointments.
It is also worth being clear about what the NED is not being asked to do. A non-executive director oversees and challenges; they are not there to run the business day to day, and the letter should reflect that boundary so neither side develops mismatched expectations. Setting this out plainly protects the NED, who does not want to be drawn into executive liability, and the company, which wants genuine independent oversight rather than a shadow executive.
Two protections round out a sensible NED letter. First, an indemnity: subject to what the Companies Act permits, companies commonly indemnify directors against certain liabilities and costs incurred in carrying out the role, and the letter records the extent of that, often alongside a note about directors' and officers' insurance. Second, the letter should be clear that the appointment does not constitute employment. Because director duties and indemnities engage company law directly, this is very much general information rather than legal advice, and a NED appointment is a document worth having reviewed, particularly the indemnity and any provisions touching the articles or requiring a shareholders' written resolution.
How to draft one in 99 Data Rooms
In the 99 Data Rooms drafter, "Legal Drafting", the Non-executive Director Agreement sits in the "People & Founders" cluster, and the template is visibly written for real UK obligations: it references the Companies Act 2006 duties rather than treating a NED like a generic contractor. As with every template here, the assistant selects vetted England and Wales clauses by ID from your answers and fills the blanks, assembling from a maintained clause library rather than composing legal wording itself. Vetted clauses, assembled.
You can open the template or describe the appointment in plain words, "NED letter, two-year term, £20k annual fee, four board meetings a year, with indemnity", and the assistant asks the questions that shape it: the appointee, the term, the time commitment, the fee, and the independence and indemnity position. It assembles the draft, including the CA 2006 duties, confidentiality and indemnity clauses, and saves it free to keep. Because a director appointment engages company law, treat the draft as a strong, current baseline and have it reviewed before you rely on it. It is general information, not legal advice.
From draft to signed appointment, in one place
Drafting the NED letter in 99 Data Rooms keeps a board-level document inside one controlled flow rather than emailing it around as an attachment. Once the draft is ready, you share it with the appointee as a tracked, revocable link, gated behind a verified email and a one-time code so you know your incoming director is the one opening it. Page-by-page analytics show whether they have read the letter and how long they spent, reasonable to want for a document that sets out statutory duties, with the honest distinction between a raw visit and a verified viewer who passed the gate.
When both sides are content, you send it for signature in the browser. The NED signs without needing an account, you can prompt them with a reminder if the board date is approaching, and the executed PDF comes back with an audit certificate recording who signed, when, their IP, intent to sign, and a SHA-256 fingerprint, a clean, dated record of the appointment for the company's books. Electronic signatures are admissible for most commercial documents in England and Wales, with exceptions such as deeds, wills, land transfers and lasting powers of attorney (see Sources), general information, not legal advice. The signed letter files itself where the company secretary can find it, and access is revocable in one click. Drafted, shared, tracked and signed, one document, never leaving the company's control.
Draft your NED agreement for free
Draft a non-executive director letter of appointment from vetted England and Wales clauses in 99 Data Rooms, keep the draft, and share or sign it in the same place, with the Companies Act 2006 duties, fee, independence and indemnity handled from the start. The free tier is real, not a trial: three rooms, twenty-five active links, forever, no card. Start for free: it is in beta and improving fast, and the route from "the board wants a NED" to a signed appointment with an audit trail already works end to end in one place.
Sources
- Directors' general duties: Companies Act 2006, Part 10, Chapter 2, https://www.legislation.gov.uk/ukpga/2006/46/part/10/chapter/2
- Duty to declare interest in a proposed transaction or arrangement: Companies Act 2006, s.177, https://www.legislation.gov.uk/ukpga/2006/46/section/177
- Electronic signatures, validity and witnessing of deeds in England and Wales: Law Commission, Electronic execution of documents (2019), https://lawcom.gov.uk/project/electronic-execution-of-documents/ ; HM Land Registry Practice Guide 82, https://www.gov.uk/government/publications/electronic-signatures-accepted-by-hm-land-registry-pg82
Is a non-executive director an employee?
No. A NED is appointed under a letter of appointment, not an employment contract, and is typically paid a fixed fee rather than a salary. They are, however, a director in law with the same core statutory duties as other directors. The vetted template reflects that distinction; this is general information, not legal advice.
What duties does a NED have under the Companies Act 2006?
A non-executive director is subject to the general duties of directors in the Companies Act 2006, including acting within powers, promoting the success of the company, exercising independent judgement, exercising reasonable care, skill and diligence, avoiding conflicts, and declaring interests in proposed transactions under section 177. The letter of appointment references these so the NED understands them. Take advice on how they apply in a specific situation; this is general information only.
Should a NED get an indemnity?
Companies commonly indemnify directors, to the extent the Companies Act permits, against certain liabilities and costs incurred in the role, and often arrange directors' and officers' insurance as well. The letter records the extent of any indemnity. Because the permitted scope is a matter of company law, this is one to check with an adviser; general information, not legal advice.
How much time should a NED agreement specify?
There is no fixed answer, it depends on the company and the role, but the letter should state the expected commitment clearly, covering board and committee meetings plus preparation and ad-hoc availability. Being concrete avoids mismatched expectations. The drafter asks you for this and assembles the clause accordingly.
Can the appointment letter be signed online?
Yes. Once drafted it flows into e-signature inside 99 Data Rooms, so the NED signs in the browser and you get an executed PDF with an audit certificate for the company's records. E-signatures are admissible for most commercial documents in England and Wales, subject to the usual exceptions. General information, not legal advice.